Welfare Reform in the USA. Frank Fuentes Deputy Director, ACYF Administration for Children and Families

Transcription

1 Welfare Reform in the USA Frank Fuentes Deputy Director, ACYF Administration for Children and Families

2 Historical Context Elizabethan Poor Laws family, local, State responsibility 1935 Social Security Act created the Aid to Families with Dependent Children (AFDC) program. Care for dependent children deprived of parental support Joint Federal/State uncapped entitlement program Need and payment standards set by States large variation Prescriptive eligibility requirements (categorical, resources, and income Related needs-based programs

3 Concerns set stage for reform 1960 s war on poverty program grows dramatically Concerns lead to 30 year national debate over issues Personal responsibility versus public caring and charity Work opportunities versus child rearing and development Human capital investment (education) versus work attachment State flexibility and innovation versus national standards and accountability What policies promote strong family values and strengthen families, rather than break them apart? How do you address long-term and intergenerational dependence?

4 Period of Program Adjustments Emergence of employment requirements and training opportunities 70 s-80 s Tighter eligibility truly needy Waivers of Federal requirements innovation Social contract Living by the rules Financial incentives to make work pay Family Support Act of 1988

5 Welfare Reform 1st Phase Personal Responsibility and Work Reconciliation Act of 1996 (PWRORA) Highly contentious, partisan and controversial at time Temporary Assistance for Needy Families (TANF) Program Child Care Child Support Enforcement Food Stamps Restrictions for Immigrants

6 TANF Purposes Provide assistance to needy families End dependence of needy parents by promoting job preparation, work and marriage Prevent and reduce out-of-wedlock pregnancies Encourage the formation of two-parent families

7 TANF - Main Features Block grant funded at historic high caseload Unprecedented new State flexibility Time-limited benefits (5 years or less) Strong work and participation requirements Teen parent provisions

8 State Policy Changes Financial incentives or disregards make work pay: Disregard $200 & ½ of the remainder of earned income Disregard all earned income up to poverty level Resource limits expanded Intact families made eligible Expanded eligibility, services and work supports to working families

9 FY Expenditures Transportation & Work Supports 2.3% Work Activities 10.7% Direct Child Care 13.8% Admin & Systems 10.3% Other 21.8% Pregnancy Prevention & 2- Parent Family Formation 18.2% Other Benefits & Services 49.8% Cash Assistance 41.0% Non-Assistance Under Prior Law 13.9% IDA 0.1% Non-Recurrent Short Term Benefits 4.3% Refundable Tax Credit Programs 13.8%

10 Welfare Reform Results Work has dramatically increased Over 600,000 clients each year Encouraging retention rates: 60-75% Caseloads have fallen dramatically from 14.1 to 5.0 million Poverty among children has declined Continuing economic struggles Devolution to communities Public support grows

11 Jul Caseload Over Past Four Years US Monthly TANF Caseload October 1999 Through September 2003 Apr-00 Jul-00 Oct-00 Jan-01 Apr-01 Jul-01 Oct-01 Jan-02 Apr-02 Jul-02 Oct-02 Jan-03 Apr-03 Oct-99 Jan-00

12 Poverty Rates Past Seven Years Rate 15% 14% 13% 12% 11% 10% 9% 13.7% 13.3% Poverty All Persons % 11.9% 11.3% 11.7% Year 12.1%

13 Research -- Family Outcomes Leaver studies: work has few negative consequences for well-being; little evidence that families are suffering. Young children, in programs that increased work and income, have improved behavior and do better in school; Caveat: For adolescents, more at-risk behavior. MFIP -- decreased (18%) levels of domestic abuse; increased marriage (7% to 10.6%) and marital stability (67% compared to 48.5%) New Hope -- Less stress, fewer worries, better parent-child relations.

14 Challenges Remain Wages above minimum wage, but below poverty Services have little impact on wage growth over 5 years Multiple Barriers to Work 30% with mental health diagnosis or addiction 25-40% of adults with learning disabilities 15-20% of adults and 15-20% of children with developmental disabilities 15-20% of women subject to domestic violence each year, with 60% over lifetime Skills/education deficits & limited English proficiency Need effective models of barrier reduction and postemployment supports for wage growth and career development.

15 TANF - Reauthorization Full Engagement Work and Other Participation Healthy Marriage Promotion and Research Welfare and Workforce Integration Waivers Child Support Enforcement Improvements

16 Full Engagement Family Self-Sufficiency Plans for ALL cases Regularly review progress of each case State flexibility plans and reviews done however State chooses

17 Why New Participation Rates? Average Effect of Caseload Reduction Credits on Required Participation Rates 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 16.4% 11.0% 5.5% 4.9% 5.5% 6.9% FY 1997 FY 1998 FY 1999 FY 2000 FY 2001 FY 2002 Adjusted Target Effect of Credit

18 Most Adults Have No Hours TANF Average Number of Monthly Adults In Allowable Work Activities Adults without Hours of Participation 56.8% Adults with Hours of Participation 43.2%

19 Total Reported Hours of TANF Participation, by Activity U.S. Monthly Average, FY 2001 Education and Training 6% Vocational Education 8% Waiver & Other 7% Employment 59% Job Search 9% Community / Work Experience 11%

20 Work & Other Participation Avg. Participation: from 50% to 70% by 2008 Standard: 40 total hours per week: 24 hours of work 16 hours of other self-sufficiency activities State decides Partial credit beginning at 24 hours 3 months (within 24) can be FULL-TIME treatment, rehabilitation, training, etc. State decides Case opening month State option to exempt Employment Credit Caseload Reduction Credit (HR-4) Eliminates separate 2-parent rate Carry-over balances not limited to cash assistance

21 Healthy Marriage Promotion & Research Overarching purpose promote child well-being Matching grant for States, Territories, and Tribes to build services, seed programs $100 million per year, Federal funding Dollar for dollar State match, can include in-kind and TANF Demonstrations, research and technical assistance -$100 million per year for public and private entities, including, faith- and community-based organizations) Reauthorize the Abstinence Education program

22 Promoting Healthy Marriages: The Role of Government Help couples who choose marriage for themselves to develop the skills and knowledge necessary to form and sustain healthy marriages How: Premarital and marriage education, support and enrichment programs Government should not: Run a dating service Tell anyone to get married Reduce resources for single parents Encourage anyone to enter or remain in an abusive relationship

23 Enhance Child Support Enforcement Encourage States to give former TANF families all child support collected on their behalf Provide Federal match for child support pass-through payments to TANF families Require States to review and adjust orders for TANF families every 3 years Collect user fee from non-tanf families Lower the threshold for passport denial to $2,500

24 Enhance Child Support Enforcement Federal seizure of accounts in multi-state financial institutions Require States and Tribes to intercept gaming proceeds Federal data match with insurance claims and settlements database Double available funding for access and visitation grants ($10 to $20 million) Over 10 years, proposals will result in $7.5 billion more in support to families

25 Child Care Funding Including TANF and State funds, CCDF-related funding has increased five-fold since 1992, from approximately $2.2 billion to $11 billion in FY TANF now represents 43% of Federal dollars for child care. 12 Billions of Dollars TANF Transfer to CCDF TANF Direct Spending CCDF State Spending

26 Child Care Maintains funding commitment Restores 10% transfer level to SSBG Increases transfer level for CCDF to 50% maximum Reduces restrictions on use of unobligated TANF balances HR-4 & Senate Finance increase mandatory funding by $1-7 billion over five years